Increased technology investment by top finance executives
World-class procurement executives spend 27% more than their peers on technology, despite the fact that they spend dramatically less on procurement operations overall, according to the latest Book of Numbers research into procurement practices and performance metrics from The Hackett Group, a business process advisory firm.
According to Hackett’s research, increased spending and improved leverage of existing technology investments are key strategies that enable world-class procurement executives to shift spending away from transactional activities and towards work that provides higher strategic value and improves effectiveness. For example, world-class procurement executives allocate 36% more of their overall procurement resources to decision support and risk management than typical companies. Technology also enables world-class procurement executives to improve efficiency, helping them reduce their cost per purchase order to $8.54, while typical companies spend 134% more. In addition, world-class procurement executives operate with 38% fewer staff than typical companies, show significantly improved cycle times, and reduced error rates.
According to Hackett’s Book of Numbers research, which is produced as part of its Procurement Executive Advisory Program, world-class procurement executives spend 27% more than their peers on technology ($1.4 million versus $1.1 million/billion of spend).